A flag-waving child is hoisted into the air as residents of Darnah, Libya, celebrate the liberation of their town from the control of forces loyal to dictator Moammar Gadhafi. Luis Sinco/Los Angeles Times/MCT

A flag-waving child is hoisted into the air as residents of Darnah, Libya, celebrate the liberation of their town from the control of forces loyal to dictator Moammar Gadhafi. Luis Sinco/Los Angeles Times/MCT

Obama to seek economic sanctions against Gadhafi's regime

WASHINGTON — President Barack Obama, breaking his silence on the mayhem in Libya, said Wednesday that the U.S. will consider "the full range of options" to respond and warned dictator Moammar Gadhafi to halt the slaughter of civilians, saying "the entire world is watching."

Obama denounced the killing of hundreds, and maybe thousands, of Libyan civilians by Gadhafi's regime as "outrageous," and said the perpetrators will be held responsible.

He didn't spell out what steps the U.S. might take, but aides said that Washington, in concert with international partners, will seek to impose new economic sanctions on the regime.

It was unclear what immediate effect Obama's words would have in Libya, where Gadhafi's opponents have seized virtual control of the country's eastern half but have been systematically targeted by regime loyalists and foreign mercenaries. U.S. influence in Libya is limited.

The crisis in Libya and elsewhere across the Middle East is presenting Obama with the biggest foreign policy test of his presidency. Along with the safety of U.S. citizens, his economic and energy policies are at stake.

The price of a barrel of crude oil for April delivery soared above $100 in intraday trading on the New York Mercantile Exchange — the first time since 2008 — before settling up $2.68 to $98.10.

Obama has come under growing pressure to do more to stop in Libya what may be the worst atrocities worldwide since he took office. Opponents of Gadhafi in Libya have told McClatchy that the U.S. and its allies should impose a "no-fly zone" and take other measures to help depose the dictator.

But U.S. officials say he's been wary of speaking out in a way that would endanger American citizens caught in Libya.

Hundreds of U.S. citizens boarded a State Department-chartered ferry Wednesday at a port in Tripoli, the Libyan capital. But the ferry's departure for the islands of Malta was delayed until Thursday morning because of heavy seas.

Other U.S. citizens, working in Libya's oil fields, remain trapped at remote locations.

Obama administration officials said the contest over Libya could continue for some time.

Gadhafi "is still in control of Tripoli. That means something," said a senior U.S. official, who requested anonymity to speak more frankly.

A second senior official said that among the options under consideration are a freeze on Libyan officials' assets and a ban on their travel that could be imposed by the U.S. unilaterally; international economic sanctions; and isolating Libya in international bodies.

Obama, with Secretary of State Hillary Clinton at his side, said she would travel Monday to Geneva to a high-level meeting of the United Nations Human Rights Council, a toothless body of which Libya is a member.

The first official said it would be "some days" before an agreement on sanctions be reached with other world powers and tailored to hurt the regime, but not the Libyan people.

Underscoring the shallowness of U.S. influence in Libya, the official said there are steps the U.S. could take on its own "that can make us feel better." But to be effective, he said, "we have to build a consensus within the international community, because there are a lot of countries that have far more developed relationships with Libya than we do."

The 27-nation European Union also appeared ready to support sanctions.

French President Nicolas Sarkozy called the violence in Libya "horrifying" and said the EU should consider suspending economic relations with the government.

The U.S. officials said imposing a "no-fly zone" to stop Libyan military aircraft from attacking protesters isn't under consideration in the near-term. "That's the easiest thing to say, but the hardest thing to do," the first official said.

The situation in Libya remained highly opaque Wednesday due to restrictions on international communications, especially with the capital.

It appeared, however, that Gadhafi retained control of much of the western Tripolitania region, although clashes were reported in the capital's suburbs, while virtually all of the eastern Cyranaica region was in opposition hands, said a U.S. official who was closely following the situation.

Gadhafi's forces also were believed to hold Sirte, the main town of the area in which the dictator was born, said the official, who spoke on condition of anonymity because of the situation's sensitivity.

At the same time, the regime appeared to be struggling to develop a coordinated effort to suppress the insurrection, with some military units remaining in their bases and only parts of others responding to trouble spots, possibly because of continued defections of officers and soldiers to the revolt.

"They are not moving in an organized fashion," the U.S. official said. "The military command structure appears to be rife with confusion."

The U.S. has limited diplomatic and economic leverage that it can use to pressure Gadhafi, experts said.

After decades of tensions and military clashes, the Bush administration re-established formal relations with Libya in 2006 after the Libyan leader accepted responsibility for the 1988 bombing of a Pan Am flight over Lockerbie, Scotland, and ended a secret nuclear weapons program.

But improvements in relations "have been very incremental since then," said Fredric Wehrey, an expert at RAND Corp. policy institute who recently returned from Libya.

Ties also have been limited between the U.S. and Libyan militaries, which only re-established formal relations in 2009 after a 35-year break. That contrasts with the extensive ties used by top U.S. commanders to encourage the Egyptian army to remain on the sidelines of the popular revolt that ousted former President Hosni Mubarak.

More important to the U.S. has been preventing al Qaida's North African affiliate, Al Qaida in the Islamic Magreb from establishing a major presence in the vast expanse of Saharan Desert that comprises most of Libya's territory.

The current upheaval could provide al Qaida with the opportunity to do just that, especially if the crisis deteriorates into a civil war pitting the regime stronghold of the western Tripolitania region against the opposition-controlled eastern wing of Cyrenaica, where the uprising erupted.

"The main thing now is the potential fragmentation of the country," Wehrey said. "The way the forces have split certainly would suggest that" could happen. The result could be more "so-called ungoverned space, especially in the south," where there has been an al Qaida presence, he said.